TULSA, Okla. -- Horner Foods here has changed its general merchandise suppliers from a rack jobber to its co-op wholesaler, Associated Wholesale Grocers Value Merchandisers, nonfood division, Kansas City, Kan.
AWG will supply general merchandise to Horner in a drop-ship program similar to its former rack jobber, but at a lower price.
"Pulling products from our co-op warehouse has eliminated a portion of the old jobber's upcharge and lowered costs by literally cutting out a middle person," said Lannie McDaniel, director of nonfood at Horner.
McDaniel declined to comment by how much costs were lowered, but said, "AWG's combined buying power of its cooperative members enables it to buy in large quantities which helps drive our costs down." Along with lowering products costs, the retailer expects to boost general merchandise sales 5% and increase margins 5% to 8%, according to McDaniel. The chain operates 4- to 48-foot sections of pet supplies, automotive accessories, baby general merchandise, lightbulbs, hosiery and socks, hardware, stick goods, bakeware, cookware and kitchen gadgets.
McDaniel said the lower costs "will allow us to continue competing against Wal-Mart and other retailers." Under the new drop-ship program, Horner will increase its general merchandise mix by 10%. Horner is currently replanogramming general merchandise sets to create space for new introductions and line extensions.
"With space for nonfood in a supermarket at a premium, you have to find the room for general merchandise and then use it the best way possible," McDaniel said. Horner will find room for the new products by tightening up dead space on shelf tiers and pegboard backings, a move which is expected to create 20% more selling space. Expanded sections will include mops and brooms, gadgets, kitchen utensils and tools, foil aluminum bakeware and baby general merchandise. Department sizes are expected to remain about the same.